Home Equity Loan Basics: Standard Home Equity Loans

A brief introduction to standard home equity loans, including their specifications and benefits.



A standard home equity loan is also referred to as a term loan or a closed loan, meaning the borrower is given a lump sum from the lender. The term and the interest rate for this type of loan are usually fixed.

Like many other loans, standard home equity loans are paid in monthly installments and the borrower is not entitled to any additional money once the lump sum has been received. The nature of this loan is very similar to a first mortgage because the homeowner is able to know the amount of payments that are due in advance.
Standard Home Equity Loan Benefits

Some benefits of home equity loans include unchanging rates and tax advantages. Borrowers can deduct up to $100,000 worth of interest payments from their federal tax returns. With these advantages, this type of loan seems very appealing.

Standard home equity loans work best for homeowners who need money for large expenses such as home improvements, weddings or consolidating bills. If you know exactly how much money you need, this loan could be the loan you're looking for, but if you think the amount you need may change, look into a home equity line of credit.

What Is a Home Equity Loan?

A home equity loan can be both useful and dangerous. It is important to know what a home equity loan is and what types are available before commiting to such a loan.



There are a number of reasons you may consider taking out a loan - such as paying for a child's education, compensating for a lost job or simply investing in a new business or property. If you are looking for a little extra money and you own a home, you could consider taking out a home equity loan.
Home Equity Loan Basics

A home equity loan, sometimes called a 'second mortgage,' is a type of loan given to homeowners. In exchange for the money, the homeowner's home is offered as collateral. The home's equity is based upon how much the home is worth and how much of the home is already paid for. To calculate your home's equity, subtract the mortgage from the home's current value.
Types of Home Equity Loans

The text shown above is a simple definition of home equity loans, but there are actually several types of home equity loans from which you can choose.

The most popular is the standard home equity loan. This loan is also known as a term or closed-end loan or second mortgage installment loan. Like a traditional loan, you are given a lump sum of money and assessed a fix interest rate. You then make payments on a monthly schedule until the loan is paid off. Once the loan has been paid, you regain complete ownership of your house.

A second type of home equity loan is called a home equity line of credit. This type of loan, just as with other lines of credit, offers you an amount and places it in an account from which you can draw money as needed. While you are only responsible for paying interest on the amount actually withdrawn, the interest rate is flexible, meaning it can fluctuate. A fixed rate is often preferred because you know before accepting money the exact amount you'll be expected to repay. A flexible rate does not offer the same security.

A third option, cash out refinancing, is not precisely a home equity loan, but does allow you to borrow against your home's value. In this scenario you actually take out a new home mortgage that is worth more your home's value. Your payments will then increase, with some of the money going toward paying off the actual home and the rest toward the home equity-like loan.
Before You Consider a Home Equity Loan

As with all types of financing, home-equity loans can be dangerous, but necessary. It is important for you to never bite off more than you can chew. Before accepting a loan, you should truly evaluate whether the purchase is worth the risk. If it is, you should be certain that you can afford the payments. Failure to pay on the loan may result in foreclosure.

Why Home Equity Lone Is Popular?

Home Equity Loan - An extremely popular and efficient way to borrow is using the roof over one's head as collateral for sizable amounts of credit. To define a few terms, equity is the difference between your home's appraised - or fair market - value and your outstanding mortgage balance. A loan refers to the amount of money you borrowed from a lender providing you with the mortgage. So basically, the idea with home equity loans is to borrow against your home's equity as a very effective way to get some things you need at a good price.

Why Home Equity Loans are popular

To be sure, borrowing against the value of a home has become increasingly popular. Why, you ask. There are two key reasons for this surge: low interest rates and tax deductibility.

The tax changes that occurred in 1986 have eliminated deductions for most consumer purchases. As a way to get around these changes in tax, consumers began borrowing up on their home value in order to make purchases. Home equity loans thus became a method adopted by homeowners to buy goods and still get a deduction.

For instance, let's say that you bought your home for $95,000 and made a 20 percent down payment of $19,000. To pay the remaining $76,000, you then took a first mortgage. On the day you closed on your home, you automatically had 20 percent equity. As you pay off the principal, you gain equity and your home grows in value.

Now, let's say that you have paid $12,000 toward the principal and your property. Remember that you property was valued at $95,000 when you bought it. Now, since you have made the payment on your principal, your $95,000-home is now worth $115,000. Your beginning equity ($19,000), plus the principal you have paid ($12,000) and the increase in your property value ($20,000) gives you $51,000 in equity.

Home Equity Loans: Equity as a Valuable Asset

Banks and borrowers both benefit from home equity loans. The reason for this is that equity is a valuable asset to have. You can put it to use without having to sell your home. And because most people's domicile is their biggest asset, lenders regard home equity loans as secure. For that reason, interest rates for home equity loans are lower than for other loans.

Who are the best borrowers of Home Equity Loans?

Earlier in the article, we have made mention that home equity loans are beneficial to both the lender and the borrower. However, like all things, home equity loans also have their downsides. The disadvantage to home equity loans is that if you default on the loan, the lender could foreclose on your home. For this reason, home equity loans are statistically most suited to stable, middle-aged borrowers.

Tips for buying a second home

By Tom Kerr - MortgageLoan.com

Before shopping for your second home, consider how you'll pay for it so that it doesn't become a burden. Using a home equity loan is often the smartest path, because you can use otherwise untapped value in your home to your advantage without raiding assets such as bank accounts, stocks, or other savings.

Here are four ideas to help guide your decision:

1. Leverage equity

If you've accumulated equity in your home, don't just sit on it. Put it to work by borrowing against it while home equity loan rates are still attractively priced. You can also use a home equity line of credit (HELOC). Banks typically charge more interest for those loans, but you avoid many closing costs and still may be eligible for tax deductions of interest and other expenses.

2. Buy property conveniently located

Buy a second home that you'll definitely use, not one so far away that you'll never visit it. Location becomes especially important if you use the property as a rental for extra income, because it will be easier to check on tenants and perform routine maintenance.

3. Consider a fixer-upper

Rather than buying someone else's idea of a dream vacation home, consider creating your own. A less-than-perfect property can quickly pay for itself if you use home improvement loans to update it, and you'll have the satisfaction of remodeling or upgrading your second home to suit yourself.

4. Mix business with pleasure

Many investors combine their use of a second home as a vacation getaway with an occasional lease or rental. Not only will you make money by leasing, you'll save money by not paying for lodging at vacation time.

If you act now, while the buyer's market is still hot and overextended sellers are desperate, you can possibly acquire an undervalued second home at a discounted price. By using a home equity loan to finance it, you'll leverage your money in two ways. The existing value in your primary home can help acquire a long-term investment with built-in profit (and holiday pleasure) potential.

Shop Smart and Save the Disappointments

If you decide to just go out on your own shopping for a vehicle you may end up disappointed and having an overall bad experience. This article will guide help you make the process much easier and stress free.

When first arriving at the dealership you will most likely be greeted by a sale person. If you are wanting to browse the lot for a minute let the sales person know that you just want to look around for a minute. Once you have looked around find your sales person that first approached you and tell him or her that you would like to get qualified. Get qualified before you test drive any vehicle, this will save you lots of time and disappointment.

After your sales person completes your application with you he or she will take it to the sales manager or F&I department. The finance department will then run a credit report and fax your information out to several lending institutions. The lenders will then fax back an approval or denial letter. If you get say 2 approvals the dealership will typically go with the one that has the lowest interest rate.

Online Home Equity Loans - Why is it Really Good?

Home owners are given the privilege to get loans with lower interest and good payment terms. This is through online home equity loans. This type of loan is great when a financial need arises and urgency is needed. A home owner can get a pretty large amount because this type of loan is secured against the Home Equity (HE).

HE loans that part of the property which the home owner can truly say he owns. It is computed as the difference when the amount of the remaining unpaid mortgage after all payments are made is deducted from the market value of the house. Banks acknowledges the ownership of the homeowner and the value of his property. This is why they are willing to accept it as security for online HE loans.

HE loans are special not only because it fetches a good amount of loan and offered with a low interest. The best thing many people want from it is its tax deductibility option. Homeowners who transact with banks for HE loans are advised to talk with a tax lawyer for this option to be accepted.

This fact is so accepted by homeowners that many of them have already spent the money they got from the loan for home improvement. This has a double purpose because home improvement increases the market value of their home which raises the home equity as a result. As the value of the home equity increase so is the amount of money they could borrow from the bank.

Now that you know choosing the right financial institution for getting online home equity loans is not that easy as some companies advertise. We on our site, Instant-online-home-equity-loans.com, guide you to take informed decision. You can also find home equity loan calculators on the site!

Life Insurance's importance

It's never too late or too early to

think about protecting your family's financial future.

Life insurance is protection against financial loss resulting from death. It is an insurance company's promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.

Why do I need life insurance?

Although you may not think about it, your ability to earn income is a significant asset and life insurance helps replace lost income in the event of your premature death. Here are some reasons people buy life insurance.

The death benefit may be used:

• To replace income the family would need to maintain their standard of living after the death of a wage earner.
• To pay off a mortgage loan and other personal and business debts or to create a rent fund.
• To create a fund for children's education.
• To pay final expenses, such as funeral costs and taxes.
• To create a family emergency fund or a fund for a family member with special needs.

How much life insurance do I need?

The State Farm Life Insurance Needs Calculator provides a quick way to get an estimate of the cash needs you may have at death. Cash needs that exceed your available assets can be covered by life insurance.

Auto Insurance

The Basics

So you’re the new kid in town, looking to put a fresh set of wheels on the road - or maybe just the same old set in a brand new neighborhood. Either way, state law requires that you insure your vehicle before hitting the highway.

Before purchasing a car, whether it be new or used, you should understand that sticker price, cost of repair and incidence of theft all factor into your premium amount. When seeking auto insurance, gather recommendations from friends and neighbors, contact the state insurance department about any company complaints and always solicit at least three price quote comparisons. Many insurers offer discounts if your car has features that reduce risk of injury (such as air bags and anti-lock brakes) or theft (anti-theft locks and alarms). Low mileage, safe driver records and long time customer discounts can save you money, as can insuring with the same company that underwrites your home. Finally, you might consider dropping collision and comprehensive coverage on “Old Betsy”. Experts believe it’s darn foolish to insure a car worth less than ten times the amount paid to cover it.

Five ways to save money on auto insurance

Face reality - Auto insurance is not cheap

Have you noticed the volume of TV and print advertising devoted to saving money on your auto insurance? The amazing amount of money spent by major insurance companies, trying to convince you that their programs can save you large sums compared to their competition, is driven by the fact that auto insurance is actually quite expensive.

As the number of drivers and automobiles increases, the volume of traffic accidents continues to rise, also. Combine the number of incidents with the current cost of automobiles, and the result is expensive insurance coverage. All insurance companies are trying to "tweak" their coverage to bring a value added component since it is difficult to simply cut premium costs.

For example, Allstate currently offers "accident forgiveness", allowing you to have an accident and not be subject to a huge premium increase or termination of coverage. While this is certainly a wonderful, valuable, and potentially important feature, in periods of personal economic turmoil, you may find that you're unable to afford the premiums for this car insurance coverage.

Here are some ways to save money that may allow you to take advantage of some of the newer value added car insurance programs.

1. Shop. Shop. Shop.

Many people assume that, because most states set insurance rate maximums, all companies simply charge the maximum to make the most money. This assumption forgets the magic word, "competition". Insurance companies are constantly balancing the combination of maximizing income, recent and projected losses, need for profit and funds to put into reserves (for losses), and competition efforts. This balancing act often results in different premiums for similar coverage, with or without value added privileges.

2. Consider higher deductible options.

Premiums can take a welcome nosedive if you increase your car insurance deductible amounts. For example, changing a $500 deductible to a $1,000 level might save you 15% to 30% or more on collision and comprehensive coverage. Investigate this option as your accomplishing tip #1. But – consider this money savings method carefully.

Can you afford a higher deductible in the event of an accident? Do your potential premium savings on your auto insurance coverage provide the relief you need in light of the higher deductible clause?

3. Consider purchasing multiple policies from your insurance company.

Many insurance companies offer reasonable discounts if you cover both your auto and home with them. This feature, sometimes combined with your years of loyalty to one company, can result in excellent savings for BOTH insurance coverages. Once again, shop around as the level of savings can vary from company to company.

4. Compare projected insurance costs before you buy that new car.

Many people assume that their auto insurance premiums involve only the cost of their vehicle. However, there are other equally important components of car insurance premium calculations. The reliability of the vehicle, the cost to repair the car, the number of incidents and losses incurred, and the general profiles of typical drivers all influence the cost of insurance.

For a moment, eliminate the sticker price difference and compare a Corvette and a Corolla. Just consider the cost to repair a fiberglass-bodied Corvette versus the standard steel Corolla. Get an insurance quote when you compare makes of autos and consider the premium difference as part of your buying decision.

5. Maintain a good credit report.

Many car insurance companies not only request a credit report, but also will discount some premiums for customers with good credit. As you might imagine, those with poor credit scores typically pay more than standard auto insurance rates.

You may question the relationship between credit scores and insurance, but the companies believe that good credit customers are more responsible than those with credit issues. Saving money on auto insurance premiums is another benefit of maintaining a good credit score.

Other considerations

Along with these five primary ways to save money on your car insurance premiums, there are a few other things you can do. Consider reducing insurance on any older cars in your garage.

For example, many experts recommend that you eliminate collision and comprehensive coverage once the value of your older vehicle equals less than ten times your insurance premium for covering it. If an older car costs you $700 per year for collision insurance but it's worth only $3,500, consider removing this coverage and keeping liability and uninsured motorist protection only.

Save money on auto insurance

Auto insurance can take up a big chunk of the monthly budget. If you live in a part of the world where insurance is required, you definitely need to keep a policy on your vehicle. But even if insurance is optional, you might still want the protection just in case. Either way, you want to save some cash on the premiums. These tips will help you save some money on the policy.

Avoid moving violations

Accidents and moving violations increase your rates. You might get a break if you take a defensive-driving course or even a more-specialized class. Contact your insurance agent for details. In the future, you should do your very best to avoid accidents and tickets. You can prevent many wrecks by being an attentive driver, for example. And you can prevent speeding tickets by following posted limits.

Pay attention to number of drivers listed

The number of drivers on the policy can affect your rates. If your boyfriend or girlfriend drives your car, your rates will probably increase. You might be better off removing that person from the policy and keeping him or her out of your driver's seat.

Know when to renew

Don't let your insurance policy lapse. Your rates might increase if you do not have continuous coverage. And even if your insurance agent understands, you'll probably have to pay extra fees. That's a waste of money.

If you can, pay a few months, or even a year, in advance. Many insurance companies offer you a discount if you pay for three months' worth of insurance at a time, for example. And if you buy a years' worth of premiums at once, you can save even more money.

Be aware of discounts

Find out about discounts that your agent offers for various reasons. Students can qualify for discounts. Safe drivers can as well. Know what you need to do to qualify for these discounts and do your best to get them.

Remove unneeded coverage

Talk with your agent about dropping coverage that you really don't need. For example: if you live in an area with a good public-transportation system, which would enable you to get to and from work if your car was involved in an accident, do you really need the extra coverage that pays for a car rental? Probably not. It'll be cheaper to just take the bus or train for a few days.

Know that what you drive matters

Different rates apply to different vehicles. If you drive a luxury car, your rates will probably be higher than if you drive some other vehicle. Sometimes, the car's color affects the rates as well. Insurance companies have formulas that help them determine your rates.

If you're about to get another car, be sure to consult your agent first. He or she can take the variables into account and tell you what your new rates will be. This can help you choose between one car and another.

Don't be afraid to shop around for new auto insurance. Maintain the current policy while you look around to see if another company will offer you better rates. Be sure to read the fine print, though: sometimes, a seemingly-good deal has a few unpleasant surprises waiting for you.

Questions to ask before getting a new auto insurance policy

You might consider getting new auto insurance for a variety of reasons. You will probably have two primary concerns: Level of protection and cost. Auto insurance tends to bring out the best and worst of people and also of the insurance industry as a whole.

Understanding the reasons behind these issues might help you ask yourself the right questions when considering new coverage.

Some important questions to ask yourself

Automobiles often play conflicting roles in our lives. They tend to evoke both love and hate in their owners. Auto insurance sometimes creates parallel feelings. Take a little time and ask yourself some questions:

• Why should I look for new auto insurance? Am I unhappy with my current coverage or cost?
• What should I expect from new insurance coverage: Better protection, rates, or claims processing?
• What problems have I had that indicate I should get new auto insurance coverage?
• What features offered by a new car insurance company might influence me to change carriers?
• Should I make cost the most important factor or should I be more concerned about quality and level of protection?

Ask these and similar questions of yourself before you start an active search for new auto insurance coverage. It is seldom beneficial to switch from one car insurance company to another every six months or one year just for cost reasons.

At the same time, it is a valid consumer complaint that many auto insurance companies have not shown much loyalty to drivers. Some companies will greatly increase insurance premiums for just one accident for drivers who have previously cost them nothing over years of safe driving.

Auto insurance companies should consider their actions, premium increases, and cancellations for those drivers who have had years of safe driving records. Ask yourself how your car insurance company has handled the loyalty issue with you personally and others.

Some important questions to ask an agent or company

Once you have decided to examine your auto insurance options, create a list of questions for agents and companies. Unless you already have serious issues with your current insurer, carefully consider the reasons for your potential desire to get a new auto insurance carrier.

Once you have decided to analyze your options, consider asking agents or companies the following questions:

How financially strong are the car insurance companies you are considering?

One of the most important considerations when evaluating any insurance company is how strong they are financially. No insurance company can protect you or pay your claims if they don't have the cash reserves to meet expected payouts.

You should seldom, if ever, consider an insurance company that has serious cash flow, cash reserve, or other financial problems. They can only help you if they are there when you need them.

What are the options for deductible amounts and what is the cost for each?

Increasing your deductible is an easy – sometimes too easy – way to reduce your auto insurance cost. However, carefully consider the real world ramifications of this approach.

Should you increase your deductible from $250 to $1,000 might save you hundreds of dollars per year on your car insurance premiums. Yet, you must understand that the next loss you have will require you to pay $1,000 of real cash before you can have your vehicle repaired.

How large a discount can I expect if I give you my homeowner's or renter's insurance coverage along with my auto insurance?

Most companies will discount both insurance policies if you allow them to insure both your car(s) and your home. Ask how much your new potential company will discount both premiums.

Should I have Personal Umbrella Policy (PUP) to complement my auto insurance?

Do you have many valuable assets that might be at risk if a serious auto accident results in a large liability award for the other party? Second homes, boats, bank accounts, or investment funds may be at risk if a court awards compensation above your auto insurance liability limits. A PUP normally protects you against a large liability award in excess of your car insurance maximums.

These are some of the questions you should ask your agent or any auto insurance companies you consider when looking for new coverage. Cost is always important, but sufficient coverage and reasonable (and fast) claims procedure and payment are even more critical. As annoying as premium payments can be, fast and fair action and payment for a claim are even more important.

All about home equity loans

Home equity loans are a very popular way to borrow money, but if you are a newcomer to this type of credit it is important to do some research before committing. For some, a simple definition of terms is a great place to start. So, just what is an equity loan?

A home equity loan is like any other type of application for credit; a check of your credit rating may be required even if you have made all your mortgage payments on time. Your good standing on the original loan will count in your favor, but other factors including your debt-to-income ratio may affect your eligibility for a home equity loan.

Define: Equity

Equity is a term referring to the value of your home compared to the amount you still owe on the original home loan. When you first purchase a home, your equity can be extremely low (or nonexistent) because you haven't had time to make payments to reduce the amount you owe.

New home owners may watch their property increase in value over time, depending on the local market. That increase in value also provides equity. This increased value, combined with your mortgage payments, eventually adds up to an amount you may be tempted to borrow against.

Possible perks

Home equity loans have some attractive perks. According to Kiplinger.com you may be able to deduct the interest on a home equity loan within certain limits set by the IRS. The interest on the first $100,000 of a home equity loan may be written off, effectively making your home equity loan interest-free for any amount under $100,000.

Tax laws are subject to change; before making a decision on a home equity loan based on tax implications, double check the tax code to make sure this perk applies to you and is in effect for the current tax year.

Possible uses

Once you are approved for a home equity loan, there are a lot of ways you can spend the money. Many credit experts say investing in home improvements with your home equity loan is a powerful use of the money; you increase the value of your home and avoid paying outright for that investment.

Are you considering a big-ticket purchase such as a new refrigerator/freezer or stove? Any appliance you plan to include in the sale of your home potentially increases the value. These items may not directly increase your equity, but if you consider selling the home later down the line these appliances could be viewed as an investment to make your home more attractive to a potential buyer.

Using a home equity loan to pay off credit cards or other bills is another way some home owners use their loan, but this can be a risky proposition. If your home goes down in value for any reason, you risk owing more than the home is worth with the combined weight of the original mortgage and the new loan.

Other considerations

It is important to remember that rules for home equity loans are much like any other type of credit. A home equity loan uses your house for collateral. If you fall upon hard times and wind up defaulting on the loan, you could lose the collateral; an important factor to consider before taking out a large amount of money against your property.

Another factor to keep in mind is changing interest rates. Your home equity loan rates may rise, and if your original mortgage is also on a variable interest rate, both payments could go up while your income remains the same. Those who are eligible to take the applicable tax break on the interest from the first $100,000 may not feel the sting of those increased rates, but if you are contemplating a larger amount it is important to make room in your budget for any potential increase.

A home equity loan can be used as a tool to increase the marketability of your home, a way to purchase expensive items or features for the house or as a way to generate capital for other needs such as legal expenses or other real estate investments. What you do with the money is up to you once you're approved; explore your options and make the most financially sound use of your new line of credit.

If you have a specific purpose in mind for your home equity loan but aren't sure about the risks, ask your loan officer for some advice—you may learn a great deal from the mistakes of other borrowers. Chances are your loan officer has seen plenty of good and bad uses for the loans they approve and can give you some excellent advice about your specific situation.

Things to know about Auto Insurance

How auto insurance companies come up with your premium can seem like a complicated formula. In truth, it is. However, that formula is based on some very simple principles. Auto insurance premiums, like most insurance premiums are determined by what type of risk factors you, the insured, have and what level of coverage you choose. Some of your risk factors are within your control, and some are not. Having an understanding of the risk factors that determine your auto insurance quote will help you get the best coverage at the best price.

An auto insurance quote is made up of different types of coverage. Liability coverage, comprehensive coverage, and collision coverage are the three main types, but there are additional types of coverage available.

• Liability coverage covers the damages you are responsible for because of an accident. Most states require all drivers to have a minimum amount of liability coverage by law.
• Collision coverage covers damage to your vehicle if an accident occurs.
• Comprehensive coverage covers damage to your vehicle that is not accident related.

Both collision and comprehensive coverage are optional but strongly recommended. You should never settle for the minimum auto insurance coverage required by law. The more auto insurance you buy, the cheaper it is. That means you can get significantly more insurance coverage with just a small increase in your premium.

A number of different risk factors go into determining how much you will need to pay for auto insurance. Gender, age, occupation, driving record, type of vehicle, and where you live are just some of the factors considered when obtaining auto insurance quotes. Based on past accident and theft statistics, insurance companies use these factors to determine the probability that you will file a claim. For example, if you have a clean driving record with no speeding tickets, insurance companies feel like you are less likely to have an accident. Therefore, your auto insurance quote will be lower than someone who has one or more speeding tickets. In the same turn, it costs more to insure types of vehicles that are prone to accidents and theft.

There are a number of strategies that can help you get a lower auto insurance quote. For one, you can shop around. While most companies use similar methods to determine premiums, there is a lot of competition for your business in the industry. Premiums for the same coverage can vary by hundreds of dollars from one company to another. You can also ask for discounts. Many insurance companies will reduce your auto insurance premium if you purchase another form of insurance such as homeowners insurance or life insurance from them. Likewise, if you have anti-theft devices or additional safety features on your vehicle you may also qualify for a discount. If you need to lower you premium further, consider getting a higher deductible. Paying your premium in fewer installments can also save you money.

While switching policies can help you save, it’s important to never leave a gap in your auto insurance when you do. Before you cancel an auto insurance policy, make sure you have another one activated. That way you will always be covered, and you can avoid any penalties your state might impose.

Get Multiple Auto Insurance Quotes in Just Minutes!

If you find shopping for automobile insurance quotes a bit overwhelming, you’re not alone. Fortunately, Insurance Quotes.com makes it easy to get free auto insurance quotes insurance quotes anytime, from the comfort of your own home. We offer plenty of resources to guide you in your search for the right policy – along with one simple, online application that allows you to receive and compare free car insurance quotes from multiple companies. And when you receive your free auto insurance quotes from our partners, we can help you choose the best policy for you.

Whether you’re shopping for free car insurance quotes for a new car or looking for better automobile insurance quotes on your current auto insurance, let Insurance Quotes.com help you find the coverage with the top online auto insurance quotes available. Get your free car insurance quotes today – and see just how much you could save!

How to Shop Smart for Auto Insurance Quotes

Because automobile insurance quotes can vary among insurers by hundreds of dollars per year, it’s important to consider the type and amount of auto insurance you need. Depending on your circumstances, you may choose any or all of the following types of auto insurance:

• Liability insurance—the minimum coverage required by most states–protects you if you’re at fault in an accident resulting in injury to another and/or damage to another’s property.
• Collision insurance pays for damage to your own car when you’re at fault in an accident.
• Uninsured/Under insured Motorist coverage protects you when you’re involved in an accident that is not your fault and the driver at fault is uninsured or does’t carry enough insurance to compensate you for your loss.
• Comprehensive coverage pays for damage to your car that is unrelated to a collision, such as theft, storm damage, fire or vandalism.

Many insurers offer premium discounts for non-smokers, low-mileage vehicles, safety or anti theft devices, or mature-driver classes. When you receive your free car insurance quotes at Insurance Quotes.com remember to ask what types of discounts each company provides.

Finally, when obtaining your online auto insurance quotes, be sure to choose a financially stable insurance company with a record of good customer service and prompt claims processing.

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How Much Life Insurance Do You Need?

If you're researching your life insurance needs, you might well be getting a lot of complicated information. It's not a simple subject.

Some financial advisors will tell you to multiply your annual income by a certain number, like 20. Others will tell you to buy only enough life insurance to replace the income you are expected to make between now and retirement. Some might recommend you buy only enough life insurance to cover your present debts.

The question "how much do I need" might not be the most useful way to approach the problem. The question you may want to ask is, "What do I want my life insurance to accomplish?" Then you can start to determine how much life insurance you'll need. Calculating your life insurance needs takes homework. It requires an individual solution, not a one-size-fits-all approach or a throwaway equation.

Why Do You Need Life Insurance?

This is a specific question, not a general topic. Think about why you're considering life insurance, or why you're considering an increase in the amount of life insurance you have. The most common reason for purchasing life insurance is to replace the income of a family member that others depend on. For that need alone, it's usually acceptable to multiply your annual salary by 20 and buy that amount of term life insurance for a period that will cover you until you retire.

If you have additional debts or obligations, you can consider adding those to the amount of insurance you need. However, keep in mind that debts and obligations like mortgages usually decrease over time, while a family's need for income replacement does not. If you and your spouse both work and are financially stable, it might not be difficult for your spouse to pay off a mortgage or debts, as long as you buy enough insurance to replace your income. If you're a single parent, however, you would probably need to purchase enough coverage to pay off all debts so that they're not passed on to your children.

Top 10 Things to Know About Life Insurance

Life insurance can be a great way to get protection for now and to plan for the future. After all, we want to make sure that our plans and loved ones are taken care of for as long as possible. Doing research ahead of time helps you get the best possible coverage at the right price. Here are some helpful facts and ways they can help you.

1. Shopping around can save money
As with most insurance, when it comes to life insurance, it pays to shop around because premiums can vary widely. And thanks to the Internet, it's now easier than ever. From research, to quoting, to buying a policy, there's never been so much information available. Even if you need to speak to an agent or company, shopping on the Internet first can make your discussion more efficient.

2. Having enough coverage is crucial
If you need life insurance enough to buy it, you also need to make sure you're not underinsured. It's important not to have too little coverage, because then you won't get the benefits you need. If you don't think you can afford life insurance, explore your options, because it's often cheaper than you'd expect. However, if you can't afford all the insurance you need right now, start with a smaller amount. You should be able to buy more at a similar price when you can afford it.

3. The healthier you are, the better the rates
It's true—healthy people get better rates on life insurance. You will be asked to pay a higher rate for anything that shortens your life expectancy (e.g., smoking, taking regular prescriptions, engaging in risky activities, and being overweight). Consider what small lifestyle changes you can make that will improve your health and possibly your rates.

4. Buying sooner rather than later can help
If you've been putting off purchasing life insurance because you don't want to pay the premiums, you may be doing yourself a disservice in the long run. The younger you are when you purchase life insurance, the lower your premiums will be. In addition, it's harder to get life insurance if you have some of the conditions that come with growing older.

5. It's important to regularly review your coverage
The end of one year or the beginning of the next is a good time to examine your insurance needs. Any life change signals the need for a review of your overall financial plan. When it comes to life insurance, you'll want to make sure your coverage still matches the changes you've made. Marriage, the birth of a child, and impending retirement can all have an effect on the insurance you need and the coverage amount that's appropriate.

6. There are different types of life insurance
Different types of life insurance have different characteristics and are intended to accomplish different things. For instance, term life insurance is generally designed to provide the maximum amount of protection for the smallest premium dollar, but only for a set period. On the other hand, cash value life insurance offers benefits for your entire life and an investment and savings component, although at a much higher premium cost. In the majority of cases, term life insurance is the better choice.

7. You might pay more by choosing monthly premium payments
You may not realize it, but your life insurance might cost more if you pay your premium in monthly installments. Many insurance companies offer a discount if you pay your premium annually rather than monthly. Although the overall cost and benefits of the policy are more important than getting a discount, you might get a lower price by paying annually.

8. You shouldn't rely solely on the life insurance offered by your employer
Many employers offer their employees group life insurance. However, this coverage is usually not enough to adequately meet your life insurance needs. More importantly, group life insurance policies from your employer are not portable, meaning that if you leave your job, you lose your life insurance coverage.

9. You should tell the whole truth and nothing but the truth
If you lie or omit information on a life insurance application, your life insurance company may be able to terminate your coverage. They may also be able to charge you for the higher premiums you should have been paying, or deny claims. For this reason, make sure to answer all questions fully. There are many different life insurance companies, and even if you don't qualify for the best rate from one of them, you may still be able to get a good rate from another.

10. Buying more can be cheaper
Life insurance usually costs progressively less per thousand dollars at higher coverage amounts (e.g., $250,000). That means doubling your coverage generally won't double your premium. If your life insurance needs increase, be sure to explore your options. It may not cost as much as you think to buy more coverage.

Auto Insurance

Insurance, also called car insurance or vehicle insurance, is an indispensable investment which assures you mental well being and a guaranteed soft cushion in case you land in trouble with your car. For example, auto insurance schemes cover car thefts, accidents and legal liabilities in case of the latter. No matter how carefully you drive, or how well you follow traffic rules, there is always a chance that maybe someone else is not being as careful as you. In the unfortunate case of you having to encounter such an irresponsible person, there is always your car insurance to help you sail through the physical , health and monetary setbacks which may result in the event of the accident. Therefore, a car insurance is as necessary or as an airbag, according to how you think, as dispensable.

For the residents of the state of California who apply for California auto insurance, it will come as a good news that the California state legal prescription for the insurance cover under the Bodily Injury Liability is set at a minimum limit of $ 15 000 per injured person. This can be extended to a maximum limit of up to $ 30 000 per accident The minimum limit advised for the cover under the Property Damage Liability Cover is $ 5 000. This system of basic coverage is therefore commonly referred to as the 10/30/5 coverage. The California Automobile Assigned Risk Plan has advised the figures for setting minimum and maximum limits for drivers in the state of California. These are $10 000/$20 000/ $ 3000 limits.

Another valuable coverage that you might want to consider as a good option is the Uninsured/Underinsured Motorist Bodily injury coverage. This priceless coverage ensures coverage against any bodily injury that might have been caused by an uninsured or underinsured driver
. Though the California state rules do not have a mandatory requirement of this coverage, it is nevertheless a good buy.

Although the terms prescribed for cover in the state of California are more consumer friendly that those prescribed in many other states, it will come as a surprise for many people that these terms can be further improvised. That is to say, that these terms are not fixed or limited. They are not fixed by the state, and negotiations with the company may lead to a sweeter deal. However, one must do one's research properly and thoroughly to get the best deal available in the state. Surfing the net, asking people and even looking for a financial or insurance adviser may not be such a bad idea, after all, this is a subject that concerns those two most important areas of your life- your money and your family's security. Buying California car insurance does ensure peace of mind.

The average California auto insurance premium rates for the residents of California in the year 2009 is $ 1 705. Compare that with the average national annual insurance premium for car insurance, which stands at $ 1,766. The low rates should encourage you to avail one as son as possible.

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You're a driver, so you know how crazy it gets on the road. Between distractions and the rush to get somewhere on time, accidents can and do happen. Fenders get bent and sometimes people get hurt. Even if you're just parked in your driveway, a tree limb can crash through your windshield or someone can steal your car. When the worst happens, auto insurance is there to protect you.

Why buy auto insurance?
Auto insurance can protect you against the financial risk associated with personal injuries and property damage caused by auto accidents, theft or vandalism.

All states require you to purchase at least a minimum amount of liability coverage. Other types of auto insurance coverage may be optional or required, depending on state regulations. If you have a car loan or lease, the lender will also generally require that you purchase coverage for the car itself.

Liability coverage
This is the state-mandated legal coverage you'll be required to have (learn more):

• Bodily injury liability: Protects your assets if you are held liable for an auto accident in which other people are injured or killed.
• Property damage liability: Covers repairing or replacing the autos or other property of other people.

This coverage will also pay for the legal costs associated with defending you against lawsuits related to accidents. To adequately protect your assets, you probably want to purchase much more than the minimum amount of coverage required in your state.

Collision, comprehensive, uninsured and underinsured motorist, and medical payments coverages
Although these coverages are optional in most states, it often makes sense to purchase them, unless you can afford to pay for losses yourself.

• Collision: Pays to repair or replace your car if it's damaged in an accident. (Learn more.)
• Comprehensive: Insures your car against damage caused by something other than an auto accident (e.g., theft, fire, flood, vandalism). It is also called other-than-collision. (Learn more.)
• Uninsured/underinsured motorist coverage: Unless you live in a "no-fault" state (where your own insurance will cover your losses), this coverage insures you against certain losses caused by other drivers with little (underinsured) or no (uninsured) auto insurance. It can cover things like lost wages as well, and provides coverage to your passengers, and those listed on your policy while riding in other cars or as pedestrians. (Learn more.)
• Medical payments coverage or personal injury protection (PIP): Covers various medical and/or funeral expenses for you and your passengers, as well as those listed on your policy while riding in other cars or as pedestrians. (Learn more about: medical payments coverage and PIP coverage.)

Additional coverages
Most of these coverages are optional, relatively cheap and provide a lot of protection, although they may not be helpful in all circumstances.

• Gap coverage: Pays the difference between the actual cash value of your car and the amount you owe on your loan or lease if your car is totaled in a covered accident. It is sometimes called loan/lease coverage. (Learn more.)
• Towing and labor or roadside assistance: Towing and labor usually covers the cost to tow your car to a repair facility or make minor repairs after a covered accident. Roadside assistance usually covers towing, minor repairs and fuel delivery, even if there was no accident.
• Rental reimbursement: Pays the cost of renting a replacement car if yours is not drivable due to a covered accident. Some auto insurance companies will send you a check for part of the allowed amount if you don't rent a replacement car. (Learn more.)

And then the insurance company pays for everything, right?
That would be nice, but it's not always true. Here are some things you'll always need to cover yourself:

• Deductibles: The amount of money that you've agreed to pay out of your own pocket before your insurance coverage kicks in. You can have different deductibles for different coverages and liability coverage never has a deductible.
• Exclusions: Events or situations your policy specifically will not cover, such as property damage or personal injury you intentionally cause or damage to your own car due to mechanical failure or wear-and-tear.
• Costs above policy limits: Any expenses that exceed the the dollar amounts listed on your policy contract for coverage you're entitled to receive.

Driving a good bargain
Many factors affect your auto insurance premium, including your age, the state in which you live, the make and model of your car, where your car is parked at night and your driving record. Although you can't do much about some of these factors, here are some things you can do to help lower your premiums:

• Increase your insurance deductible.
• Eliminate optional coverages if you don't need them (e.g., rental reimbursement if you have other means of transportation).
• Eliminate collision and comprehensive coverage if you drive an older car that wouldn't cost much to replace and if you could afford to pay for repairs if necessary.
• Ask about available auto insurance discounts (e.g., low-mileage discounts, discounts for safety or antitheft devices) for your auto insurance (if applicable in your situation).
• Avoid buying a vehicle prone to theft or expensive to repair.
• Drive safely to establish a good driving record.
• Maintain good credit.

Shop around
It's important to shop around for auto insurance coverage. Insurance premiums for the same coverage on the same car can vary widely among different insurers. A particularly good time to investigate your alternatives is when your current insurance policy is up for renewal, but you can shop and change policies at any time. Get quotes from several reputable companies, but don't let price be your only consideration. Make sure the coverage offered by each insurer meets your needs, and find out if the insurer has a solid financial strength rating.

8 Teen Auto Insurance Mistakes

Do you have a teenager who drives, or one who will soon? Then you'll probably find out that adding a teen to your car insurance policy is sort of like balancing a valuable vase on a tiger's head: it'll probably end in an accident, and it'll probably be expensive. (Lesson number one: don't balance vases on tigers.)

The bad news: you have a teenager eager to get behind the wheel – and recent RateWatch data shows that adding a teen driver to your auto insurance policy costs over $2,000 a year on average.

The good news: auto insurance rates are coming down, so this is the perfect time to shop for policy savings. It can cost even less if you manage to…

Avoid some of these common mistakes

1. Let your kid get bad grades.
Were you aware that a "good student" discount could take as much as 10–15% off the price of your car insurance policy? You are now. Some parents pay their children to maintain a B average or better; this discount will have your children paying you instead.

2. Buy a new car for your child.
All of those safety features will get you auto insurance discounts, right? They might, but it costs more to insure a new car – for you and your teen. Find a safe, used car and save on car payments and insurance.

3. Skip in-car driver training with your kid.
Let the driving school do it. Right parents? I mean, that's why you pay them the money! Not so. No matter what your state legally requires, the more time you spend in the car teaching your teenager to drive, the better.

4. Don't set a curfew.
Part of raising a child is letting them take responsibility, so there's no reason to impose limits. Well, not exactly. Even if your city doesn't have a curfew for teen drivers, you should consider it. Statistics show that teenage driving deaths rise dramatically from 9 pm to 6 am. And if you remember your own youth, you'll agree that there's no good reason for teens to plan trips past 9–10 pm.

5. Don't worry about packing the car with friends and distractions.
The most common cause of teen accidents is driver distraction – either from a car full of friends or a cell phone that's blowing up. It gets even worse with loud music, texting and taking pictures with a cell phone.

6. Speed, drink and don't wear your seatbelt.
It amounts to telling your teen the law is optional. If your child gets a ticket, restrict access to the car. If it's something serious – like a DUI – take away their driving privileges.

7. Lower your deductibles or keep them the same.
A low deductible means your auto insurance company will pay more if there's an accident. Raise it, and you could knock a lot off your premium. Dropping collision coverage on your teen's car can also save money. Just remember that you'll have to pay more for repairs in both cases, so calculate your savings before making the switch.

8. Make one of the other seven mistakes.
(Just kidding.)

8. Let your teenager drive a small, old car.
If you saw mistake number two and thought you could avoid it by getting your teen an older compact car, you're probably wrong. If it's not a safe car, you won't qualify for safety discounts.

9. You said there were only eight mistakes!
Well, I lied. That's right; I said it: I lied. I'll let you in on a little secret: there are probably way more than nine, or even ten! But do you know the biggest one of all? (Drum roll, please.) Not shopping around to compare rates! Insurance.com data shows the average difference between the highest quote for adding a teen and the lowest quote is over $2,000 a year. Failing to compare auto insurance rates can be a very expensive mistake.

How Car Insurance Rates Work?

People often ask us how car insurance companies determine what rates to charge. (Well, no they don't. But we think it's important to clear up any confusion.) Many factors determine what premium rate you see when you ask for quotes. A common misconception is that rates are set by law and can't be changed. Although the methods each auto insurance company uses when setting rates are regulated by state laws, the rates themselves are not set by the state. This fact means that there will be different rates for each company. Once you understand more, you'll see why comparing rates from different companies can save you money.

How is my car insurance rate set?
Let's look at what happens when you submit an application for car insurance. First, you are sorted into an individualized group based on each piece of information in your application, as well as other sources. Once your customized group has been determined, the insurance company calls up the pricing information for that group. Finally, any discounts you qualify for are subtracted from the price, and your quote is returned. The entire process is completed by sophisticated software behind the scenes, based on information you enter online or an agent types into a computer.

Claims (70%)

Other Expenses (26%)

Profit (4%)

Where Does My Premium Go?

Why do insurance companies have such different rates?
Because each company has many different small groups and different prices for those groups, rates can vary considerably from one car insurance company to the next. Each company has its own set of claim payments and expenses, and they must set rates based on that information.

What information can affect the auto insurance rate quotes you receive?
Depending on state laws, which often restrict the type of information an insurance company may use, these factors will usually affect your rates:

Who You Are	What You've Done
Age	Had accidents
Gender	Gotten traffic tickets
Marital status	"B" average in school (for students)
Zip code	Taken a Defensive Driver course
# of years licensed	Let your policy lapse
Credit history	Filed bankruptcy
Home ownership	Filed lots of claims
Occupation
What You Drive	How Much Coverage You Want
Year	Bodily Injury and Property Damage
Make	Medical Payments
Model	UM/UIM
Hybrid?	Comprehensive and Collision
Annual mileage	Rental reimbursement
Price	Roadside assistance
Safety features

Here's the breakdown by percentage of premium for coverages on a sample car insurance policy for a sample driver:

Liability (45%)

Collision (37%)

Comprehensive (9%)

Uninsured/Underinsured
Motorist (5%)

Medical Payments (4%)

Coverages by % of Premium

Are auto insurance rates discriminatory?
Some things are always prohibited from consideration by law, such as race and religion, and others are sometimes not permitted, such as credit history, ZIP code, and the first speeding ticket. However, other factors that may seem unfair, such as age, gender and marital status are often considered. Since each company places a different weight on each factor, it's important to shop around to find the best company for your situation.

Let's see how much you've absorbed about car insurance rates and how the premiums are used. All of the answers can be found in this article, but it's more fun if you don't look! If you want to find out more about certain questions, you can click their links to read an article that explains the answer.

1. Your car insurance rate could be higher if you:

Are male.
Live in the city instead of the country.
Are single.
All of the above.
No Answer

2. Your rates will always increase if you get a speeding ticket.

True
False
No Answer

3. The color of your car is used to determine your rate.

True
False
No Answer

4. All companies offer the same auto insurance discounts.

True
False
No Answer

5. Which statement is true?

Rates are similar for each company because they are set by law.
Rates are similar for each company because they evaluate applications the same way.
Rates are similar for each company because most of the money is profit.
Rates can vary a lot because each company has different experiences with claims and expenses.
No Answer

6. Uninsured/underinsured motorist coverage is expensive and unnecessary.

True
False
No Answer

7. Car insurance companies often use race and religion when setting rates.

True
False
No Answer

8. Car insurance companies often use credit history when setting rates.

True
False
No Answer

9. Most of your auto insurance rate is the legally-required liability portion.

True
False
No Answer

10. Car insurance premiums are mostly used to give the insurance company a profit and pay for their miscellaneous expenses.

True
False
No Answer

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